On wage- and profit-led demand regimes: learning from the evidence

Abstract

This paper contributes to the empirical research around the “wage-led” or “profit-led” demand regimes. It first reviews how Kalecki, and then Steindl, approached the relationship between economic growth and income distribution. Then, empirical analysis carried out under the probabilistic approach to econometric modeling shows statistical evidence, estimated through cointegration analysis, that in the long run, in three very open economies—Mexico, France, and Korea—the wage share is positively associated with demand and output. It finally discusses the macroeconomic dilemma that almost all countries have to face, i.e., a positive effect of a high-wage policy on demand and employment may diverge from a negative effect on output compatible with external equilibrium.     

Geometrical Interpretation of the Mean and the Constant in a Box-Jenkins Time Series Model

Certain manuals and computer programs mistakenly identify the mean with the constant in Box-Jenkins time series models. In this paper, it will be shown that (a) the mean and the constant have different values in autoregressive models, and (b) they have an algebraic and graphical relationship.     

Total factor productivity and R&D capital in the spanish economy, 1965–1980

A formal model of productivity growth and technical progress is presented. The model takes into account embodied and disembodied technical progress as explanatory variables. The slowdown in productivity growth for the Spanish economy after 1972 is explained for 92% by the decline in the rate of growth of technical progress originated from domestic R&D and technology imports.     

Credit Risk in Two Institutional Regimes: Spanish Commercial and Savings Banks

Although credit risk is an important factor that financial institutions must cope with, the determinants of bank problem loans have been little studied. Using panel data, we compare the determinants of problem loans of Spanish commercial and savings banks in the period 1985–1997, taking into account both macroeconomic and individual bank level variables. The GDP growth rate, firms, and family indebtedness, rapid past credit or branch expansion, inefficiency, portfolio composition, size, net interest margin, capital ratio, and market power are variables that explain credit risk. However, there are significant differences between commercial and savings banks, which confirm the relevance of the institutional form in the management of credit risk. Our findings raise important bank supervisory policy issues: the use of bank level variables as early warning indicators, the advantages of bank mergers from different regions, and the role of banking competition and ownership in determining credit risk.     

The Impact of Basel II on Lending to Small- and Medium-Sized Firms: A Regulatory Policy Assessment Based on Spanish Credit Register Data

The objective of this paper is to evaluate the impact on bank credit exposures to small- and medium-sized Spanish firms of the current proposal for reform of the 1988 Capital Accord using information from the Spanish Credit Register. Capital requirements for exposures to those firms, according to the various revisions of the proposed capital reform (from the January 2001 consultative document to the April 2003 one), are calculated to analyze whether the existing pattern of bank financing of small- and medium-sized firms might be altered. Finally, the incentives for individual banks to adopt the advanced internal ratings-based approach proposed by Basel II are evaluated.     

Is the leadership style important in R&D departments in Spanish industrial companies? An empirical analysis

This paper aims to thoroughly look into the effects of the differences between the diverse leadership styles on innovative outputs (intensive, efficient and eco-efficient) in Spanish industrial companies. A questionnaire for the factories was sent and was received between the months of September 2013 and June 2014. A total of 142 valid questionnaires were received. Several regression models were used in the empirical analysis. The results show that charismatic leadership positively induces an intensive innovative output, at the same time as it improves firms’ eco-efficient innovative output. Likewise, the individualised consideration that characterises transformational leadership makes this leadership style produce positive results on the whole group of innovative outputs considered. At the other end of the leadership spectrum, the transactional style causes negative effects on the relationship between innovative activity and innovative outputs, and more specifically, on the efficient innovative output.     

ECONOMIC RECESSIONS,BANKING REFORM AND THE FUTURE OF CAPITALISM1

In the 2010 London School of Economics and Political Science Hayek Memorial Lecture, the author argues that flaws in the design of the monetary and financial system were responsible for the global financial crisis and the subsequent recession. The crash reflected the unsustainable nature of the bubble induced by artificial credit expansion created by fractional‐reserve banking under the direction of central banks. Such boom–bust cycles will continue until radical reforms are implemented, including a 100% reserve requirement for demand deposits.     

Success factors in a CRM strategy: technology is not all

Organisations today need to create, maintain and reinforce relationships with customers. Customer Relationship Management (CRM) seems to have helped firms to better understand their relationships. However, past studies have looked at technology and customer orientations (COs) as key factors. This paper aims to analyse the simultaneous effect of Market Orientation (MO) (rather than CO), Knowledge Management (KM) and other organisational factors in order to explain how to implement a successful CRM. Findings suggest that MO and KM may influence CRM success. Data also suggest that particular organisational factors such as employees, leadership and specific know-how may be key factors in determining the success of CRM. For efficiency resource management, this paper recommends to focus not as much in technology, but on programmes for selection, training and motivation of employees which may enhance CRM objectives. Companies may also pursue a higher customer value by putting in place and reinforcing KM schemes in specific know-hows about CRM.     

Factors Influencing Organic and Fair Trade Coffee Growers Level of Engagement with Cooperatives: The Case of Coffee Farmers in Mexico

We study the factors influencing the percentage of organic and fair trade certified coffee sold through a cooperative by growers of five cooperatives in Mexico. The percentage of coffee sold through the cooperative was used as a proxy of growers’ engagement with a cooperative. Using factor analysis and a fractional probit regression, we evaluated the proposition that the level of engagement can be explained by transaction cost economics, social norms and connections, and farmer and farm business characteristics. We found that farm size, uncertainty regarding cooperative time of payment to the members and cooperative commitment on price to be paid negatively influence the level of engagement. In contrast, asset specificity, relational commitment, and price have a positive impact on engagement. Our results may help cooperatives and policy makers to build strategies aiming to increase this level of engagement. This is relevant because lower grower engagement has been found to be positively correlated with weak performing cooperatives.     

Identifying micro-destinations and providing statistical information: a pilot study in the Canary Islands

Municipalities and regions are often used as an object of tourism analysis at the subnational level. This occurs because administrative borders are used to implement tourism policies and collect statistical information. However, administrative boundaries may not always be suitable for studying tourism destinations at a local level. Sometimes, particularly in high-density tourism destinations, several differentiated tourism areas occupy a single municipality; tourism areas may, and often do, extend beyond municipal boundaries and tourism destinations may not occupy the whole of the municipal area. As such, a new level of analysis is often required: the micro-destination. There are few tourism concepts as imprecise as that of the destination. Therefore, the process of identifying and establishing the boundaries of a micro-destination is by no means a straightforward one. This paper presents six criteria for establishing the boundaries of this type of tourism area. Of these six, the two primary criteria used are: the concentration of tourism establishments; and tourism typologies and supply characteristics. These criteria have been applied as part of a pilot study in the Canary Islands. Statistical information for nine micro-destinations is generated using the geolocation of tourism establishments together with information obtained from both supply-side and demand-side surveys.